Yannick Even, Swiss Re

Insurers are in a race against time to update their processes as disruptive technological trends like big data, artificial intelligence and growing connectivity push deeper into the insurance industry, Yannick Even, director and head of Insurtech solutions, Asia, with Swiss Re, has said.

Those wanting to get ahead could look to China, where a new wave of insurers are tapping into alternative data sources from online retailers or health providers to better understand their customers and provide a more streamlined experience and personalised solutions, he said.

Even told the Investment Magazine Group Insurance Summit at the Four Seasons, Sydney, that in tandem with the Chinese Government’s drive for financial inclusion, more financial service providers are developing risk score models with access to alternative data sources that could enable insurers to create more personalised products and move into new risk areas.

Only about 25 per cent of Chinese people have access to a credit score, and even fewer have insurance; banks and insurers faced difficulties performing the risk assessments required to give traditional products to the population, Even explained.

To address this, data from increasingly prevalent mobile payments, and from tech giants such as Baidu, Alibaba and Tencent, is being used to create alternative credit scores…and health scores. This leverages the digital interactions customers have with the world through a universe of apps.

Credit scores of various types are now being used by much of the digital financial services sector to give customers access to products that they couldn’t purchase before.

Data sources around the world

The Western world has its own tech giants with their own troves of data. And there are other data sources emerging around the globe, such as the internet of things and health data from wearable electronics.

“Most of the insurance fields now see this technological change as a real threat to their existing model but also to the projected plan they’ve shared with their shareholders,” Even told the summit.

Many insurers are stuck at the “first wave” of digitisation, where they see the online world as simply an alternative distribution channel, Even said. The “second wave” involves partnering with a digital company the insurer is working with, such as a health provider, to better understand the entire customer journey.

‘Second wave’ companies

One insurance business doing this is Zhong An, which describes itself as China’s first complete online insurance company.

Even says Zhong An scaled its business by systematically partnering with various digital companies, understanding how they deal with their customers and creating products tailored exactly for this interaction.

Now they are “leveraging all this data to understand much more the risk that they take and to service the real protection needs of customers, to such an extent that they now are, basically…providing value to each of their partners.”

Another second-wave company is Ping An – China’s largest insurer – which uses facial and voice recognition to better manage the risk of mis-selling to customers who don’t fully understand what the agent has told them.

“Basically, all of the products are sold – even when the agent is there – through the iPad,” Even explained. “The iPad will basically record the full conversation and with the micro expression technology [Ping An has] developed, they are able to tell in real time if people understand what they are buying and give insight back to the financial adviser to maybe repeat [information] or maybe speak more slowly or maybe move to another product.”

This also has the advantage of being more appealing to the regulator, Even said.

Ping An has also built the Ping An Good Doctor healthcare service platform, which connects to the back end of hospital systems and provides a front-end platform for customers to book appointments, organise medicine delivery, access health coaches, perform genetic tests and carry out other services. This helps Ping An better understand the needs of customers and build prediction models around different diseases.

Insurtech, itself, has developed a range of solutions for insurers around the world, Even said. One involves partnering with a startup that makes wearable electronics and a large health insurer in India, to provide a service that connects members to a health coach.

“I actually have an Indian coach who is looking to all the things I eat, the steps I do and gives me some very personal advice every day,” Even said. “For me, I find it very engaging. It’s not for everyone but I’ve lost a bit of weight.”

Another service, launched in the UK, helps people with diabetes self-manage their condition by tracking and managing their diet and exercise, along with providing access to experts if needed.

Ben Hurley is a journalist and editor with more than a decade of experience in the industry. He has written for The Australian Financial Review, Business Review Weekly, The Guardian and a range of specialised and industry publications.